"It seems strange that property here declines in value over time rather than increases in value..."
It depends on the time frame one is looking at. Those who bought a house in Japan right after WWII have made a fortune. Those who bought a house in the big cities right before the bubble also managed to make a fortune.
After moving to Japan and getting married I initially tried to buy a house, but was unable to get a loan as I didn't have PR at the time. The price of the house I was interested in tripled in value during the bubble. Nothing special about the house at all. By the time I got PR and was actually able to borrow money the price of RE was too high and we really didn't want to be a slave to a mortgage for the next 50 years. Fast forward and the situation has changed in many ways. It is now cheaper to buy than rent in many secondary cities and rural areas in Japan.
Japan is a 'funny' market for real estate as it shows how supply and demand works and also how the myriad number of restrictions and taxes affect the market. (By the way these restrictions and taxes were IMO some of the main reasons for the property bubble and bust in Japan as well as the huge flow of Japanese money that ended up in foreign RE.)
In the big cities the price of RE is still high, but in the country areas it is cheaper (Probably still way to expensive given the supply of vacant houses, abandoned land, declining population, and restrictions on the use of the land along with ridiculous taxes and fees for buying and selling.)
In many areas you can see the how the population is declining just by looking at how many people use the local train station. Some places have seen the number of people using the train decline by 50 or 60% over the past 30 years. Not good places to buy a house or apartment.
All that being said, Japan does have some very nice houses and prices are quite reasonable even in the big cities compared to here in Australia.
The median price of a house in Melbourne is now A$903,859 or in yen terms about 80 million yen. Sydney’s price is 30% more than that. Near the Melbourne CBD the median price in the Inner East suburbs is over 125 million yen – those are the medians…….
The price of RE here in Australia is ridiculous. That is so even in the suburb I live in which is an hour from the Melbourne CBD by train (If and when they actually run and they are usually late as well !)
A two bedroom unit on around 200 square meters of land will cost you around A$500,000. The cheapest freestanding house currently listed is A$550,000. A reasonable house on 150 – 160 tsubo will run around A$650,000. Those are in the ‘cheap’ areas. Around the village proper the price will be around the $A1 million area or more.
And unlike in Japan where you can get cheap loans from places like Rakuten (under 1% after discounts) the adjustable rate mortgages here are around 4.5% or so.
Rents are high as well with the rent for a cheap 3 – 4 bedroom house in my suburb around A$410 a week (160,000 yen a month). Vacancy rates are very, very low too. There are a total of 120 houses and 12 units/apartments for rent in the suburb.
An example of how prices have moved up here in Australia can be seen in the article below which shows the prices moving up by some 80% in areas around he Mornington Peninsula over a five year period. Huge demand and population growth has pushed up property prices in Australia unlike in most of Japan where population decline and lack of demand has had the opposite effect( except in the big cities.)
https://www.domain.com.au/news/were-fed ... 20-h0k2m6/
And finally, a ridiculous article on ‘cheap’ houses in Victoria.
Most of these places have very few jobs and are so far away from the big cities that well…………..
https://www.domain.com.au/news/10-of-th ... 05-h037m3/
Which would you rather have: a ½ acre in Chiba around 1 ½ hours from Tokyo for A$300,000 or a dump out in Ouyen 5 hours by car from Melbourne for $125,000?????
If I had a choice I know which one I would pick and it wouldn't be in Australia.....................